PIP Hangs in Balance; Costs Would Shift to Providers, Insurees

Personal Injury Protection (PIP) insurance in Florida is set to expire October 1 and that is bad news for health insurance providers, individual pay premiums and hospitals. In an early May session, Florida state legislators failed to take action on the no-fault, 36-year-old law.

The existing law requires motorists to carry $10,000 in PIP insurance. Without its’ protection, Floridians face financial liability if they injure someone in an accident or are treated at a hospital and do not have health insurance. Florida law doesn’t require drivers to buy medical payments coverage. If the PIP law expires without changes, that coverage would remain optional.

The Miami Herald reported the Florida Senate Banking and Insurance Committee passed a bill in late March that would extend the existing PIP coverage to 2009. Sen. J.D. Alexander, R-Lake Wales, introduced Senate Bill 2626, which would require insurers to offer medical payments of $25,000 per person and $50,000 per accident.

But unlike PIP, the new bill’s benefits cover only emergency-room or in-hospital treatment during the first 72 hours after an accident. It wouldn’t cover treatment for rehabilitative services, chiropractic doctors, dentistry, diagnostic imaging, prosthetics and other non-hospital care covered under PIP.

Gov. Charlie Crist said that PIP is important and he wants legislators to extend the repeal date. Hospitals applaud the move. The Florida Hospital Association (FHA) and the Safety Net Hospital Alliance of Florida are working with health plans, emergency medical specialists, physicians’ groups and first responders to lobby support for Crist, according to the Herald-Tribune.com (HT). The FHA estimates it would create a $350 million shortfall a year for its member hospitals.

PIP is vital since one in five Floridians have no health insurance. At least PIP provides auto-accident victims access to health care services and timely coverage. Forty percent of crash victims transported to Florida’s hospital emergency rooms and trauma centers have no health coverage to pay for their treatment other than PIP.

The HT reported in 2005, Florida hospitals received about $350 million in PIP reimbursement for treating crash victims. Sarasota Memorial Health Care System received $4 million, part of the $55 million to $60 million in PIP reimbursements made to hospitals in the six-county Tampa Bay region. Without PIP, these costs would be shifted to local hospitals, already strained financially. This could endanger trauma centers, especially those outside major metropolitan areas that are struggling to remain operative. These lifesaving facilities accept all patients, including the indigent.

Individual policy-holders likely would assume costs of auto-crash medical care. Employers, struggling to provide employee health coverage, would not be able this burden. Blue Cross/Blue Shield estimates that without PIP, health premiums for a family of four would increase $240 to a yearly total of $336, said the HT.

New litigation would evolve since fault would have to be established to determine liability in auto accidents. Eliminating no-fault/PIP would allow accident victims to sue for subjective non-economic damages.